Benefits Calculation Overview

One of the most important aspects of administering a pension plan is calculating pension benefits. You use periodic processing to keep certain plan information up to date, then you run calculations to calculate benefits, based on specific termination or retirement dates, known as event dates.

Calculations determine the benefits owed to pension plan participants. Running a calculation applies all your plan rules to a specific employee base for a specific event date. The "event" can be preretirement, termination, retirement, or in-service death or disability. It has a specific benefit commencement date. The calculation produces a final benefit amount in all the available optional forms.

You can run estimates based on projected data: projected hours and earnings, specific assumptions for increasing the rate in an employee's salary, the taxable wage base, and other pension data.

You can get immediate results for small calculation runs, or schedule large runs for later. If you save a calculation, you can rerun the process either with a revised set of assumptions or for a final calculation.

If you want to run calculations for several employees in one batch job—for example, to produce annual benefit statements or notices for a special early retirement window—you can create calculation groups and run several calculations at once.

You can look at the calculation results online or print worksheets showing results for individual employees.